This Global Startup MOBU Uses Forward-thinking Technology to Upgrade Capital Markets - Reuters


This Global Startup MOBU Uses Forward-thinking Technology to Upgrade Capital Markets

This Global Startup MOBU Uses Forward-thinking Technology to Upgrade Capital Markets

Wed Jul 10, 2019 - 07:50am UTC

Currently capital markets have high fees, slow settlement, limited transparency and too many middlemen.

July 10, 2019 – A South African-based global startup MOBU is changing that by providing the full infrastructure solution for digital securities – the new generation of digital assets. MOBU realizes that although the information revolution is impacting every business, capital markets are really feeling the effects and the world is moving towards real-time, lower fees and more automation. To lead, MOBU understands the need to rethink the organization for a fully digitized economy. It means being more open and accessible—being able to use its platform to organise services around their clients, while expanding their reach. For entrepreneurs it can be very costly to raise capital while access to a wider investor network is essential to ensure success. For individuals it can be very difficult to access cross-border secondary markets and banking services. MOBU is upgrading capital markets by transforming the landscape of the securities industry by leveraging distributed ledger technology (DLT) to vertically integrate major financial services under one roof. MOBU partnered with one of the leading broker dealers in the USA to give investors the opportunity to participate in an early stage funding round for growth capital.

“Digitization of private placement issuance has estimated cost savings of 40% over a five-year period” – Entoro Capital.

Juan Engelbrecht, CEO of MOBU, refers to three pillars when highlighting the integrated product offering. The first pillar represents its digital securities issuance platform. MOBU supports entrepreneurs that want to raise capital – like an investment bank. Only vetted projects are launched on the platform to ensure that reputational capital and accountability become the golden thread for success. Engelbrecht firmly believes there are endless opportunities in Africa. KPMG International affirms that the global annual size of venture capital investments exceeds $100 billion while the WeeTrackers’s Venture Investment Report declares that Africa receives less than 1% of this deal flow although the continent represents 30% of the world`s natural resources and 60% of arable land according to Citi Bank. The issuance platform will be the primary private market for the African continent with an Artificial Intelligence (AI) element to engage the audience. Apart from addressing financial growth needs the platform also has a significant social impact.

MOBU’s second pillar encapsulates a digital securities exchange to provide secondary trading to global investors – like a stock exchange. A 15% equity stake in an operational licensed stock exchange in South Africa as well as a board seat enables MOBU to be the sole broker for all digital securities on the exchange, offering a cost-effective secondary market with low costs, increased transparency, streamlined processes, increased automation, instant settlement and change of ownership with no credit risk in terms of settlement. Blockchain technology effectively replaces clearing and settlement and provides transparency in trading on the back-end. The total costs of trading equities on traditional secondary markets and exchanges range between 0.5% – 3% per trade on average, compared to fees of between only 0.1 – 0.25% seen on digital securities exchanges. Engelbrecht points out that MOBU will develop the mob20 standard protocol for digital assets going forward to include the rules for corporate actions like stock splits, dividend pay-outs, etc. to automate the process which currently amounts to 10Bn USD per annum in fees alone.

MOBU’s third pillar embodies a low-cost digital banking solution with own IBAN whereby current or corporate accounts can be setup in minutes. Apart from offering blockchain company accounts and converting fiat to digital currency worldwide, MOBU also issues debit cards for digital assets and local currency to be used practically, on a day-to-day basis. Services are extended to the 2Bn unbanked people that exist in the world according to the World Bank – Global Findex. After more than 50 years of African banking, only 34% of adults in sub-Saharan Africa have bank accounts according to the findings of the Family Office Investment Summit. Investment banking in South Africa is emerging and a lot of the market is untapped. MOBU’s goal is to become the trusted source of deal flow to Africa and the secure secondary market for global investors by leveraging the advantages of DLT.

“In five years, 100% of stocks and bonds on Wall Street will be tokenized” – Robert Greifeld, Former CEO of NASDAQ.

Within the next five years, the industry will be shaped by automation, self-service expectations, and the continued rise in non-bank liquidity and execution providers. In this context, modern and forward-thinking technologies offer ways for MOBU to keep abreast and get ahead. Blockchain technology has the potential to revolutionize how transactions are accomplished in the business landscape, both domestically and globally. At its core, blockchain is simply a distributed database, with an identical copy stored on many computers. A digital security, also referred to as a smart security or security token is a proven concept that already represents a few hundred million dollars of assets – a digital asset that represents the same legal rights than a share certificate. Blockdata states that blockchain transfers are 388x faster and 127x cheaper than traditional remittance transfers. According to research done by Accenture, DLT could drive $8 billion in savings on a cost base of $30Bn across eight of the top 10 global investment banks. Significant parts of the trade process could be reduced, that can lead to potential costs savings of 50%.

“10% of the world GDP will be built on Blockchain application by 2025” – Deloitte

Similar to the introduction to internet years ago, the revolutionary epoch of DLT and the new era of digital ownership has just begun. MOBU provides the platform and full infrastructure solution for the world to participate in a regulated, trusted and compliant manner – it is simply just more efficient than traditional markets.

MOBU – The SMART Investment Bank for Capital Markets 2.0

For further information on MOBU:

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